How safe is Captain Algorithm?

> One must bear in mind that any safety measurement is the measurement of the possibilities of negative consequences of a given behaviour against a set of events or environmental factors. For instance one can measure the safety of the use of a given laptop by dropping it one hundred times from an height of 1 meter. Shall the laptop receive little to no damages at all after one hundred drops than it is fair to conclude that the laptop is safe to use for the chance of the laptop dropping from an height higher than 1 meter on an everyday use - environmental parameter - is fairly low. However shall the environmental parameter of everyday use  be changed to a military environment than the test must be tougher - for instance increasing the height of the drop - and the safety appreciation of the use of the same laptop will be unclear as long as one does not know the frequency of possible use in the civil use or military use. Or said otherwise from a civil use perspective the use of the laptop can be considered as fairly safe while from a military use the use of the laptop can be qualified as unsafe. So intuitively one can understand that the safety measurement is about the "toughness" of a given object - or proposition - in parallel with and relatively to the frequency of events that put the object to test - two distinctive dimensions that human psyche tend to overlook because the way we apprehend safety on an empirical basis naturally compounds causes and phenomenons. Although the first dimension of toughness is easy to measure - in the case of the laptop, the height of the drop - the second dimension is far more difficult to assess - i.e. it is difficult to assess the possible changes in the environmental parameters of use - for instance considering the case the user being a reservist. It is precisely the second dimension that most safety measure or claim will ultimately stall upon for there is no warranty for possible environmental parameters changes i.e. one cannot know for certain when adverse condition will arise - therefore requiring a precautionary approach.

 

Consider for instance the case of air flight safety. Scientists and engineers know for certain that under certain weather conditions and wind speed, a given airplane has no chance to be able to produce enough lift to keep on flying. However it is still very safe to travel by airplane because most of the time the peculiar adverse weather conditions that might put the plane in danger do not occur most of the time - even though that cannot be known for certain as opposed to the concept of "bulletproof".

 

The same goes for Captain Algorithm. The core assumption - being the longer the period of time one consider, the likelier the market will fluctuate with a larger amplitude - on which Captain Algorithm is built, holds as true in most known economical and political scenarios - even though that cannot be known for certain as opposed to the concept of "bulletproof".

 

So when Captain Algorithm considers that it is safe, it is safe within a certain reasonable projective boundary of the Forex market not stagnating in a narrow band for a long period - therefore the longer that period could be the better the rating of the trading account is and the safer the trading is.

 

Besides, Captain Algorithm also has a precautionary approach. It has adverse conditions detection capabilities with programmed responses. For instance shall the volatility of a pair is too high, Captain Algorithm will temporarily stop trading with that pair, or shall the market stagnates for too long on a given pair, Captain Algorithm will suggest the user to consent to the losses and definitively stop trading with that pair.

 

How accurate is the rating of a trading account by Captain Algorithm?

> Captain Algorithm will consistently run the same mini-program in order to rate a trading account. The mini-program runs a test that is similar to a crash-test of the trading account in order to assess the safety level of the trading account - the simulated crash being the stagnation of prices within narrow bands. The longer a trading account can withstand such adverse market evolution the safer the account is and the higher the rating is as well. So similarly to a car crash-test, the rating by Captain Algorithm provide a measure of how the account will cope with adverse conditions but not how likely such adverse conditions might happen. Thus the safety measure given by Captain Algorithm is equivalent to a solidity test as opposed to a probabilistic approach that will try to estimate the likeliness of adverse events to occur. Consequently the rating provided by Captain Algorithm is truly reliable vis-à-vis its own usage. For instance shall an account be rated "Malevolent" in the event of a slight adverse evolution of the market - a stagnation of 2 weeks - you might simply loose your account meanwhile an account rated "Good" will not have any dent from such market evolution and will keep making profits as usual. Since Captain Algorithm cannot claim how likely a market stagnation might occur - justifying the built-in pre-programmed precautionary capabilities - it is very important that you heed the account rating by Captain Algorithm in order to find a safer trading account.

 

Can Captain Algorithm loose?

> Yes of course. It is precisely because Captain Algorithm knows exactly when it looses - when market stagnates withing narrow bands for long periods - that it is possible for Captain Algorithm to assess the safety level of a given trading account and deploy appropriate tactics to avoid such loosing scenario - such as constant market monitoring and communalisation of trade information.

 

However the probability that the market fluctuates within a narrow band for a long time AND that Captain Algorithm has been unable to avoid it, still exists therefore there is still a chance that Captain Algorithm looses.

 

Please note that should that event occur it will be very visible on the chart and pass a certain threshold Captain Algorithm will suggest the user to consent to the ongoing loss - an example of such event is the pegging of a pair for which Captain Algorithm will remotely close the pair.

 

How likely can I loose my trading account?

> Captain Algorithm rating system allows you to have an appreciation of the safety of your trading account against potential adverse market evolution - i.e. market stagnation. So the higher your account rating is, the less likely you can loose your trading account. Captain Algorithm rating system works fairly similarly to a crash-test : the more solid your car is, the less likely you will be injured by having an accident. When your trading account has a very good rating it will be fairly similar to driving a tank i.e. accidents may happen now and then but those accidents do not matter. However the likeliness of such accidents or adverse market evolution to occur is not assessed per se - even though the occurrence of such adverse market evolution is constantly monitored and shall it be higher than a certain threshold Captain Algorithm will simply stop trading with that pair.

 

How can I make my trading safer?

> First of all you need to refer yourself to the section that deals with choosing the correct trading account. Then try to have a trading account which specifications are closer to the specifications in the ideal column. To trade with an account which specifications are better than the recommended level will increase significantly the safety of your trading. An important point to bear in mind is to move to another account type that is better suited for your initial equity - such as moving to a Mini or Micro Account. Last but not least, change the symbols you are trading with. For instance trading well-known stocks or indices - when the commissions applied by your broker is reasonably low - are safer than trading Forex.

 

Secondly upon starting Captain Algorithm select a more conservative trading mode - the option is also available via the settings button on the chart in your trading terminal. By selecting a more conservative trading mode, Captain Algorithm will automatically reduce the volume of the positions it takes and will be stricter in deciding to open a new position.

 

Thirdly consider splitting your investment into two trading accounts. Indeed each trading account on which is run Captain Algorithm is autonomous - i.e. each trade decision depends specifically on the trading parameters of the account and trade decisions may differ from one account to another in such a way that one may be loosing and one may be winning. More interestingly the loosing account will share the information so that other accounts will not repeat the same mistake. However do not split your account into two accounts unless both accounts received a good rating from Captain Algorithm. Said otherwise it is much safer to have one account with a very good rating than two accounts with bad ratings.

 

Should I run Captain Algorithm redundant?

> It is strongly recommended to run Captain Algorithm redundant whenever you can. Captain Algorithm acts as an auto-pilot to all the trade positions it has to manage, so of course every time Captain Algorithm is cut off from the trading server it will be troublesome - although all positions taken by Captain Algorithm have Stop Losses set.

 

Actually one sure way of making Captain Algorithm loose is to frequently and untimely interrupt the running of Captain Algorithm.

 

So running Captain Algorithm redundant will definitively increase the safety of your trading and make sure that Captain Algorithm will not miss any trade decision nor opportunity.

 

Does Captain Algorithm require a good VPS?

> Captain Algorithm can still run well on an entry level Windows VPS - starting from 521mb and 1 core. Since it is strongly recommended to run Captain Algorithm redundant whenever you can it is advised to have two entry level VPSs running rather than one single more beefy VPS - for the chance that two entry level VPSs encounter an issue simultaneously is still dimer than the chance of one single beefy VPS to encounter issue - particularly on Windows.

 

Is Captain Algorithm fit as a long term investment?

> Yes absolutely. Captain Algorithm has been designed from the start as a way to achieve consistent profits in the long run. An account that has received a good rating or above will be very resilient to adverse market evolution - hence the safety - and will be able of making profits in the long run with reduced risks.

 

Moreover since the larger the amplitude of market is the higher the profit is, Captain Algorithm is actually more profitable in the long term as in a longer term a given pair will have a more significant price evolution.

 

Are ECN accounts safer?

> Yes. ECN accounts are safer with regard to Captain Algorithm than non-ECN accounts because ECN accounts will offer better spread conditions and faster trade execution.

 

However on non-ECN accounts, one may enjoy additional promotions and advantages that may make such non-ECN accounts more attractive such as deposit bonus, tradable rebates, no commission, contractual negative balance protection etc.

 

As a trader you will have to make a trade-off. Generally larger traders will profit much more from running Captain Algorithm on ECN accounts while it can be more advantageous for smaller traders to enjoy promotional offers offered by non-ECN accounts.

 

What is the difference between contractual negative balance protection and programmatic negative balance protection?

> Contractual negative balance protection is a protection you enjoy upon signing the user agreement with your broker i.e. no matter what you cannot loose more than your initial equity.

 

Programmatic negative balance protection is a functionality of Captain Algorithm that will automatically close all running and pending positions of your account when the the margin level of the said account is below a certain threshold in order to avoid you to loose more than your initial equity.

 

The difference is that in the first case you are guaranteed to not loose more than your initial equity while in the second case you may loose more than your initial equity because upon closing your positions - in order to protect your account - there is a chance that the closing positions cannot be filled due to the market lacking of liquidity for instance. So Captain Algorithm will keep sending closing orders until they can be filled and they may be filled at a price that may let your account in the negative; that is to say that programmatic negative balance protection of Captain Algorithm will protect you against negative balance in most cases however it is not "bulletproof".

 

It is an important consideration to bear in mind if you have the intention of trading Stocks or Cryptos : for the possible lack of liquidity of Stocks and Cryptos are real while it is much less so for Forex.

 

One solution to make programmatic negative balance protection more efficient is to raise the Negative Balance Protection Level percentage upon launching Captain Algorithm which will limit even further the chance that your account run into negative balance.